Lidya Priyanka, Margono Setiawan

THE EFFECT OF TOTAL QUALITY MANAGEMENT

ON THE PERFORMANCE OF SMEs THROUGH
MEDIATION VARIABLE OF
ORGANIZATIONAL COMMITMENT
JAM
15, 1 Lidya Priyanka
Received, July 2016 Master in Management Faculty of Economics and Business, Universitas Brawijaya
Revised, September 2016
February 2017
Margono Setiawan
Accepted, March 2017 Faculty of Economics and Business Universitas Brawijaya

Abstract: The purpose of this research is to analyze the impact of Total Quality Management
(TQM) on Small-Medium Enterprise (SME) performance through organizational commitment
mediation on tempeh chips SME in Sanan, Malang. The research use 30 SMEs sample as
respondents, considerating SMEs with PIRT and Halal certificates, data analysis was done
with WarpPLS 5.0. The research result show that TQM has positive significant impact on SME
organisasional commitment. Organizational commitment has significant impact on SME perfor
mance. The result also show that the organizational commitment does not mediate the signifi-
cant impact of TQM on SME performance.

Keywords: total quality management, performance organization, commitment organizational,

small medium enterprise

Jurnal of Applied
Management (JAM)
Volume 15 Number 1,
March 2017
Indexed in Google
Scholar
Correspondention Author:
Lidya Priyanka, Master in
Management FEB, Universi-
tas Brawijaya, DOI: http://dx.
doi.org/10.18202jam230263
32.15.1.14
The number of SMEs in
Indonesia in 2014 according
to data from the Ministry of
Cooperatives and SME
reached 56.2 million units, and
was capable of absorbing
97.2% workers from the total
labor force. SME plays an
important role in economic
growth and in reducing
unemployment and poverty. It
also plays a role in foreign
exchange earnings. SME is
the primary or secondary
source of income for many
small to medium households in
Indonesia, assisting society’s
groups, including women,
which are also the minorities.
The phenomenon that occurred in 2015, the world
economy experienced a great shock and caused the
exchange rate of rupiah against the dollar to weaken
and affected the macro and micro sector. The
business unit that is included in the micro sector of
SME (Small and Medium Enterprises) is a business
that is growing and driving economic stabilizer,
resistant to the weakening of rupiah because many
SMEs that use local raw materials and also strengthen
the country’s economy. The existence of MEA at
the end of 2015 will be an opportunity for SMEs to
develop a range of economic quality in Southeast Asia
in the development of free market. MEA is a good
opportunity to demonstrate the quality and quantity
of products and Human Resources (HR) of Indonesia
to other countries openly, develop business and market
products to foreign markets because trade barriers
will tend to be decreasing and even do not exist.

116 116
JOURNAL OF APPLIED MANAGEMENT | VOLUME 15 | NUMBER 1 | MARCH 2017
 The Effect of Total Quality Management on The Performance of SMEs Through Mediation Variable
However, on the other hand, MEA will be a threat
for SMEs inside the country if the actors of SME are
not prepared for the invasion of foreign products and
are not able to compete. In addition, there are
challenges to be faced by SMEs, like the increasingly
sharp competition needs competent resources. SMEs
need to increase their competitiveness as creative
and innovative industries, improve their standards,
design, and product quality of the packaging, to make
it more attractive, in order to win the competition.
TQM is expected to be used to improve the perfor-
mance of SME. TQM can improve performance,
particularly in SME Tempe chips in Sanan Malang,
East Java, which now has been producing a variety
of flavors and product packaging which is quite good.
There are some SMEs which are already marketing
their products outside the city and even abroad; there-
fore, it is necessary to apply TQM to produce better
performance. Furthermore, research gap in this study
is in line with the research which was conducted by
Ahmad, et al. (2015), which found a significant
relationship between the TQM practices and business
performance, Bahri et al. (2012), stating that TQM
practices do not affect the organization’s performan-
ce. Rahman et al. (2015) stated that organizational
commitment does not influence the performance of
the organization. TQM which can improve the perfor-
mance of SME through organizational commitment
is the result of the research which was conducted by
Gonzalez, et al. (2013), stating that TQM, organiza-
tional commitment, employment, and performance’s
organization has a positive and significant relationship.
The purpose of this study is to analyze the effect
of total quality management (TQM) on the performan-
ce of small and medium enterprises (SMEs) through
the mediation of organizational commitment of SME
Tempe chips in Sanan, Malang. The theoretical
benefits of research are to increase knowledge about
TQM, especially the effect on the performance of
SME and to be a reference for future researchers in
examining the same problem in the future, while the
practical benefit is as input and suggestions, also
considerations that can be obtained for those who
concern about the same thing and SME food and drink
in Malang city, from the reference knowledge about
the influence of TQM on the performance of SME
based on the organizational commitment factor.
DIKTI ACCREDITED SK NO. 36a/E/KPT/2016
LITERATURE REVIEW
Total Quality Management
According to Besterfield et al. (2003), TQM is a
process for providing quality of products and services
to customers by improving the productivity. The
indicators of TQM are 1) Leadership, moving the
members and activities of SME related to the targets
which want to be achieved, the trained employees
and the needs of SME. 2) Employee engagement,
mutual respect, accepting the suggestions and input
openly. 3) Customer satisfaction of employees,
producing products like customers’ expectation, and
being friendly to customers. 4) The relationship with
employee suppliers, establishing a good relationship
with suppliers, having good communication and giving
trust. 5) Continual improvement.
Organizational Commitment
Allen and Mayers (1990) stated that organizatio-
nal commitment consists of several indicators, which
are affective commitment or members’ care,
continuance commitment or ongoing commitment,
normative commitment, and members who want to
survive.
Performance of SME
The organizational performance of SMEs which
refers to Russel (1993) is a performance that can be
achieved by a group of members of the organization.
The performance indicators of SMEs which are
included in the output according to Russell (1993) are;
Quality of performance is the process or the adjust-
ment in the ideal way of doing the activities or doing
activities as they are expected. Quantity of perfor-
mance is the amount generated which is realized
through the currency, the number of units, or the
number of cycles of activities that have been finished.
Time of performance is that the activity has been
completed faster than the specified time and
maximizing the time available for the other activities.
Effectiveness of performance is the use of the
resources of company in the form of human, financial,
and technology, which are used maximumly to obtain
the results of performance.
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 Lidya Priyanka, Margono Setiawan
Framework of Research Concept
In a previous study, it was found that TQM
influences the performance of the organization or
company. The result of relevant study, including Bon
and Mustafa (2012), has a positive relationship bet-
ween the practice of TQM and innovation. According
to Prajogo and Sohal (2006), TQM has a direct
significant positive relationship to the Organizational
Performance, which consists of (product quality,
product innovation, and process innovation). However,
there is a finding of a research in which TQM has a
negative relationship. It was found in the research
which was conducted by Bahri et al. (2012), the direct
influence of TQM on organizational performance is
not significant with negative coefficient.
The relevant research related to the indirect
influence of TQM on organizational performance
which is mediated by other variable is the research
which was conducted by Bahri et al. (2012), stating
that the indirect influence of TQM on organizational
performance is positively significant through the
culture of organization. Samuel and Zulkarnain (2013)
stated that the implementation of SMM ISO can
improve the performance of employees significantly
through the culture of company’s quality as a me-
diating variable.
The practices of TQM can improve organizatio-
nal commitment. It was proven by Chih and Lin
(2007), whose research shows strong and positive
relationship between leadership style, TQM, and
organizational commitment. In addition, the finding
about the importance of TQM implementation is
followed by continuous improvement. The role of top
management, customers’ focus, teamwork, and
business commitment are the most important factors
in organizational commitment. Other researchers,
Hatak, et al. (2015), argued that product innovation
gives positive contribution to the commitment of family
company. The further researchers, Mendes, et al.
(2014), suggest that with the results obtained, it con-
firms the idea that the adoption of TQM principles is
associated with a more favorable attitude of organiza-
tional commitment and organizational citizenship
behavior, the influence of TQM is significantly positive
on organizational commitment.
Good organizational commitment, which is
considered to be able to increase performance, has
118 JOURNAL OF APPLIED MANAGEMENT | VOLUME 15 | NUMBER 1 | MARCH 2017
been studied by previous researchers, Hatak et al.
(2015), suggesting that commitment gives positive
contribution to the performance of the family
company. Other researchers, Khan et al. (2010), state
that there is a positive and significant influence bet-
ween organizational commitment (affective commit-
ment, continuance commitment and normative
commitment) and Job Performance. Achievement at
work emerged as a determinant of organizational
commitment. Respondents’ answers to various ques-
tions indicate that employees feel comfortable in the
work environment, and organizational commitment
increases by showing a high performance. Based on
the results of the previous studies, the hypotheses
are:
H 1 : Total Quality Management influences the
organizational performance of SME.
H 2 : Total Quality Management influences the
organizational commitment of SME.
H 3 : Organizational commitment influences the or-
ganizational performance of SME.
H 4 : Total Quality Management indirectly influ-
ences organizational performance through
organizational commitment of SME.
RESEARCH METHOD
This research used a quantitative and causal.
According to Malhotra (2004), a quantitative study is
a research methodology that aims to qualify the data,
which is applied in particular statistical analysis. While
the study design is a causal relationship, the concept
of causality is when the relationship of the occurence
of X increases the opportunity of the occurrence of
Y. Samples in this sudy are 30 SMEs which are
engaged in tempe chips industries in the Sanan,
Malang city. The sampling technique used is purposive
sampling, by considering SMEs Tempe Chips which
have PIRT and Halal certificates. Respondents who
filled in the questionnaire are the leaders or the people
in charge of SMEs. While the instrument used is ques-
tionnaire sheet by using a Likert scale. The data was
analyzed by using Warp Partial Least Square 5.0.
FINDING
Description of Respondents’ Characteristics
From 30 SMEs tempe chips in Sanan, 60% of
them were established between 2000 to 2009, 43.3%
 The Effect of Total Quality Management on The Performance of SMEs Through Mediation Variable
of them have less than 5 employees, 63.3% of them
market their products in Malang city, 76.7% of them
have PIRT certificate, 66.7% of them have leaders
between the ages of 30–50 years, 56.7% of them have
the most female leaders, and 63.3% of them have leaders
whose last completed education is high school education.
Result of Instrument Test
Validity test result shows that the result of rcount
of TQM in instrument number X11 up to X114, Organi-
zational Commitment Z11 up to Z116, Performance of
SME Z21 up to Z213, shows the value of > 0.30, so all
instrument items are declared valid and able to
measure what is desirable and reveal the data from
the variables studied.
 Cronbach’s Alpha value of TQM is 0820,
Organizational Commitment is 0.747, and Perfor-
mance of SME is 0854, meaning that the value> 0.60.
It can be concluded that all the instruments are reliable
in measuring the variables, and the further analysis
can be done.
The Analysis Result of Partial Least Square
The Analysis Result of Measurement Model
(Outer Model)
The analysis results of outer model for indicator
reliability and consistency reliability indicator show
Figure 1. Path Model and P-values
Processed primary data, 2016
DIKTI ACCREDITED SK NO. 36a/E/KPT/2016
the value of > 0.6 (Fomell and Larcker, 1981; Nunnally
and Bernstein, 1994), then it can be concluded that
all instrument items are reliable in measuring variable
of TQM, Organizational Commitment and Perfor-
mance of SME. The result of convergent validity and
discriminant validity has a value of > 0.50 (Chin 2010).
It can be concluded that variance of indicators can
be explained and the model has good discriminant
validity. The analysis result of Structural Model (Inner
Model). The estimation result of the model in the
form of a path can be seen in Figure 1.
In Figure 1, the path coefficients and p-values, it
can be seen that the variable of TQM of SME gives
direct and significant impact on the performance of
SME with P-value generated <0.01. Variable of TQM
of SME gives significant influence on Organizational
Commitment with P-value obtained <0.01. Organiza-
tional Commitment gives significant effect on the
performance of SME with P-value of <0:02. The
analysis result shows the main effect, in which TQM
gives significant effect on the performance of SME,
thus the test of the effect of mediation can be conti-
nued. Index results of good of fit Inner Model are:
Goodness of Fit Model
In Table 2, it can be seen that the P value for the
Average Path Coefficient (APC) is 0.001, Average
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 Lidya Priyanka, Margono Setiawan

R-squared (ARS) is 0.030 and the Average Adjusted
R-squared (AARS) is 0047. All those three indicators
show a significant result. The cut-off P-value for APC,
ARS and AARS, which is recommended as the
indication of fit model is> 0.05, or 5% (Kock, 2013).
The value of Q Square of the analysis result is
that Commitment amounted to 0.194 and Organizatio-
nal Performance of SMEs amounted to 0.398, if the
value of Q Square which is generated by every
endogenous variable> 0 (Stone (1974 and Geisser
1974), it means that the model has relevant predictive.
The value of Average block VIF (AVIF) amounted
to 1.148, and Average Full Colllnearity VIF (AFVIF)
amounted to 1.609, the value generated is <3.3, which
means that there is no problem about multicoloniarity
between indicators and between latent variables. GoF
which is produced refers to Tenenhaus, et al. (2005),
which is 0380 > 0.36, meaning that fit model is very
good.
The index of Symsons paradox (SPR) is 1, R-
squared contribution ratio (RSCR) is 1, and nonlinear
bivariate causality direction ratio (NLBCDR) pro-
duces 1, which indicates the ideal value. The result
of statistical suppression ratio (SSR) value is 0.70,
the value is rounded to 0.70, then the result is less
than ideal. Thus, it means that there is no problem of
causality in the model.
Result of Hypothesis Test
The result of test is presented in Table 1 below:
H1: TQM affects the organizational performance
of SMEs. The analysis result shows the value of
coefficient is 0.656 (positive), P value is less than 5%
or 0.001 <0.05, then the result of hypothesis H1 is
accepted, so that TQM gives positive significant
effect on the organizational performance of SMEs.
It can be concluded that the more increasing TQM,
the more significant effect it will give in improving
the organizational performance of SMEs Tempe Chips.
H2 : TQM affects the Organizational Commit-
ment. The analysis result shows the coeffi-
cient value of -0359 (negative), P value 0.013
<0.05, then the result of hypothesis H2 is ac-
cepted, so that TQM gives significant nega-
tive effect on organizational commitment of
SMEs. Thus, from the result of negative co-
efficient, it can be concluded that if TQM
increases, it can decreases the organizational
commitment and vice versa, if the organiza-
tional commitment increases, it can reduce
the TQM.
H3 : Organizational Commitment affects the or-
ganizational performance of SMEs. The re-
sults shows the coefficient value of 0.349
(positive), P-value 0.015<0.05, then the re-
sult of hypothesis H3 is accepted; therefore,
the Organizational Commitment gives posi-
tive significant effect on the organizational
performance of SME.
It can be concluded the better Organizational

Table 1. Result of Hypothesis Test

H Hubungan Coefficients P Value Sig Information Hypothesis
TQM Organizational Performance
H1 0.656 < 0.001 0.05 Significant Accepted
of SMEs
H2 TQM Organizational Commitment -0.359 0.013 Significant Accepted
0.05
Organizational Commitment 
H3 0.349 0.015 Significant Accepted
Organizational Performance 0.05
TQM  Organizational Performance
Not
H4 of SMEs through Organizational 0.155 0.05 Rejected
-0.125 Significant
Commitment
R21 = 0.129 =13% R22 = 0.348 = 39%
Source: Processed primary data (2016)

The result of hypothesis test in Table 1 can be Commitment, the more significant effect it
explained as follows: will give in improving the organizational per-
formance of SMEs.

120 JOURNAL OF APPLIED MANAGEMENT | VOLUME 15 | NUMBER 1 | MARCH 2017

 The Effect of Total Quality Management on The Performance of SMEs Through Mediation Variable
H4 : TQM gives indirect effect on Organizational
Performance through Organizational Commit-
ment of SME. The result shows that the co-
efficient value of -0125 (negative), P value
0.155> 0.05, thus the hypothesis H4 is re-
jected, so that TQM gives no significant ef-
fect on the organizational performance of
SME through the organizational commitment
of SME with a negative coefficient. There-
fore, organizational commitment does not
mediate the influence of TQM on the organi-
zational performance of SMEs Tempe Chips.
The analysis result shows that the value of R21
= 0.129 = 13%, meaning that the effect of variable of
TQM in explaining the organizational commitment by
13% or the amount of the contribution of the influence
of TQM in explaining the organizational commitment
by 13%, and the remaining 87% is influenced by other
variables outside this research model. The analysis
result of the value of R22= 0.348 = 39% means that
the level of contribution of the influence of TQM on
the organizational performance of SMEs through
organizational commitment by 39%, and the remaining
61% is influenced by other variables outside this
research model.
Direct and Indirect Effect
The result of direct and indirect effect is presented
in Table 2 below.
Table 2. Direct and Indirect Effect
No Relationship
Direct Effect
1 TQM Organizational Performance of SMEs
2 TQM Organizational Commitment
Organizational Commitment 
3 0.040
Organizational performance
Indirect Effect
TQM  organizational performance of SMEs
4 -0.125
through Organizational Commitment
Total of Effect (f2)
Source: Processed primary data (2016)
In Table 2, it can be seen that most of direct
effect is shown by the direct effect of TQM on the
Organizational Performance of SMEs. Total of direct
effect amounted to 0.517, and indirect effect of TQM
on the Organizational Performance of SMEs through
DIKTI ACCREDITED SK NO. 36a/E/KPT/2016
Organizational Commitment amounted to -0.125, so
the total of effect amounted to 0.392. The influence
0392> 12.35 can be concluded that the amount of
influence of TQM on Organizational Performance
of SMEs Tempe Chips through Organizational
Commitment is in the category of big.
Correlation between Variabel Indicators
The analysis results of correlation between the
indicators of TQM on the organizational performance
of SME. The correlation test between the indicators
of the strongest influence shows indicators of custo-
mer satisfaction with the quality of 0.566 and conti-
nuous improvement with a quantity of 0.421. Correla-
tion of the weakest indicators shows the employee
involvement with effectiveness of work by 0.08 and
employee involvement with quantity of 0.083.
TQM on Organizational Commitment. The
greatest correlation among the strongest indicators is
shown by the indicator of continuous improvement,
with the normative commitment amounted to -0.472,
and the relationship between suppliers and normative
commitment amounted to -0.346. The weakest
indicators are indicated by the relationship between
suppliers and continuance commitment amounted to
-0.026, leadership and continuance commitment
amounted to -0.027, and employee engagement and
continuance commitment amounted to – 0.027.
Amount of Effect Sub Total Total of Effect
0.348
0.129
0.517
-0.125
(-0.359x0.349)
0.392
Organizational Commitment on Organizational
Performance. The correlation among the strongest
indicators is shown by the indicator of continuance
commitment and the working time by 0.481, and
indicator of continuance commitment and the quantity
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 Lidya Priyanka, Margono Setiawan
of work by 0.46. The weakest correlation among
indicators is showed by the affective commitment and
the quality of work by 0.014, also the continuance
commitment and the effectiveness of work by 0.049.
DISCUSSION
The analysis result shows that TQM gives a
significant positive effect on the organizational perfor-
mance of SMEs. Thus it can be interpreted that the
more increasing TQM the more improving the
organizational performance of SMEs. The strongest
influence is shown by the correlation between the
indicator of customer satisfaction and the quality and
the indicator of continuous improvement and quantity.
The descriptive analysis result of the highest average
value of the indicator of TQM is demonstrated by
customer satisfaction with excellent interpretation. It
reflects that Tempe Chips produced by SMEs in
Sanan are preferred and favored by customers, and
the employees are also friendly in serving the custo-
mers. The finding of this research is also supported
by Prajogo and Sohal (2006), stating that TQM has a
direct significant positive relationship on the Organiza-
tional Performance, which consists of (product quality,
product innovation, and process innovation), showing
that there is effect of TQM on the organizational
performance.
Another research which supports the finding of
this research is Kwansik (1994), that finding shows
that there is a positive and significant effect between
the successes of TQM interaction with organizational
performance. The difference that occurs is that
variable of TQM is successful in the service of organi-
zations, which is considered important rather than the
manufacturing company. However, the finding about
the effect of TQM on performance is not consistent
with the research which was conducted by Bahri et
al. (2012), that finding shows that there is no significant
effect of TQM on organizational performance with a
negative coefficient. This means that the implemen-
tation of TQM has no direct relationship to improve
organizational performance.
The analysis shows that TQM gives significant
negative effect on the Organizational Commitment
of SMEs. It can be concluded that if TQM increases,
it can decrease the organizational commitment, an
122 JOURNAL OF APPLIED MANAGEMENT | VOLUME 15 | NUMBER 1 | MARCH 2017
otherwise, if the organizational commitment increases,
it can reduce TQM. The negative effect is statistically
due to the influence of suppression mediaton. The
ideal suppression index is 1, while the result of the
analysis obtained is 0.70, thus it is considered less
than ideal. When we refer to Spirtes et al (1993), if
the value of the coefficient equal to or greater than
the correlation value, then suppression occurs, this
may cause negative effects. If it is linked to research
negative effect, it may be caused by the respondents,
who are subjective, because the ones who filled the
questionnaires are the leaders or the people in charge
of SMEs, whose most of the educational background
<High School, aged between 30-50 years, and if TQM
practices are implemented, they will find it complicated
and difficult.
The greatest influence is shown by the correlation
between the indicator of continuous improvement
with normative commitment, and the relationship
between suppliers and normative commitment. The
highest descriptive average value of indicator in the
variable of organizational commitment is the indicator
of continuance commitment, with good interpretation.
Supported by the theory of Basterfield, et al. (2003),
TQM principles about continuous improvement have
ongoing relationships with the members of SME, who
are working hard to achieve organizational goals of
SMEs. The finding of this research is not consistent
with the finding of Mendes, et al. (2014), who found
that TQM gives significant positive effect on organiza-
tional commitment. It shows that TQM can increase
organizational commitment. The result also reinforces
the opinion that using the principles of TQM is
associated with improving organizational commitment.
It is also not consistent with the research which was
conducted by Gonzalez, et al. (2013), which streng-
thens the relationship between TQM and organizatio-
nal commitment that employees who have a strong
commitment to the company will feel that they belong
to the organization they work in, in order to achieve
organizational objectives. This shows that the mem-
bers become part of the organization.
The analysis result shows that Organizational
Commitment gives significant effect on the Organiza-
tional Performance of SMEs. It can be concluded
that the more improving the Organizational Commit-
ment, the more significant effect it will give to the
 The Effect of Total Quality Management on The Performance of SMEs Through Mediation Variable
organizational performance of SME. The greatest
impact is shown by the continuance commitment to
working time, and indicator of continuance commit-
ment to the quantity of work. Descriptive analysis
result shows that the average value of organizational
commitment is good. The research result about the
effect of Organizational Commitment on Organizatio-
nal Performance of SMEs is consistent with the
previous research which was conducted by Hatak,
et al. (2015), finding that commitment gives positive
contribution to the performance of the family com-
pany. Other researchers who support the result of
this study are Khan et al. (2010), stating that there is
a positive and significant influence between organiza-
tional commitment (affective commitment, continuan-
ce commitment and normative commitment) and Job
Performance. Achievement at work emerges as a
determinant of organizational commitment. Respon-
dents’ answers to various questions indicate that
employees feel comfortable in the work environment,
and organizational commitment increases by showing
great performance. The inconsistent result of study
is shown by Rahman, et al. (2015), who found a corre-
lation between affective commitment and achieve-
ment, also normative commitment and job performan-
ce is not significant with continuities commitment,
organizational commitment does not give significant
effect on performance.
The analysis result shows that the indirect influen-
ce of TQM to organizational performance through
the mediation of organizational commitment of SMEs
is not significant negative effect, thus TQM through
organizational commitment cannot increase the
influence of performance of SMEs significantly.
Therefore, organizational commitment does not
mediate the effect of TQM on the organizational
performance of SMEs. This could be due to the
negative influence of TQM with organisasonal
commitment. The research finding about indirect
effect of TQM on organizational performance through
mediation is not consistent with the research which
was conducted by Bahri, et al. (2012), the indirect
effect of TQM on organizational performance is
significantly positive through organizational culture,
which shows that TQM influences organizational
performance through the mediating variable. Samuel
and Zulkarnain (2013) argue that the implementation
DIKTI ACCREDITED SK NO. 36a/E/KPT/2016
of SMM ISO indirectly can improve the performance
of employees significantly through the culture of com-
pany’s quality as a mediating variable. The further
researchers, Gonzalez, et al. (2013), state that there
is positive significant relationship between TQM,
organizational commitment and performance of the
company. The result of human resources is very
important to be able to implement TQM practices,
thus it will improve organizational commitment and
organizational performance of SMEs.
The result of the study is presented in the
discussion above. It used the theoretical background
of experts and scientific research methods, and it is
also presented in a systematic way. However, there
are limitations to this study. If there are found some
limitations that require improvement, it can be
improved in future studies. Limitations of this study
include: The object of this study is limited to that which
have PIRT and Halal certificates. The samples used
are 30 SMEs Tempe Chips, which have PIRT or Halal
certificate.
CONCLUSION AND SUGGESTION
Conclusion
Based on the result of analysis and the discussion,
it can be concluded that the more increasing the TQM,
the better the performance of SMEs Tempe Chips,
and vice versa, if the performance of SMEs increases,
it can increase the TQM. TQM practices in SMEs
have been running well. It is demonstrated by custo-
mer satisfaction, in which the products of Tempe
Chips produced by SMEs are preferred by customers.
The more increasing TQM, the less the organizational
commitment of SMEs, and vice versa, if organizational
commitment increases, thus it can reduce TQM. The
negative effects found are due to the people who
responded to the questionnaire are the leaders or the
people in charge of SMEs, so that it is subjective.
Most of their educational background <high school
between the ages of 30–50 years. If TQM practices
are implemented, they will find it complicated and
difficult. The better the organizational commitment,
the better the performance of SMEs. High influence
of organizational commitment is shown by keep
working in the company. Thus, it can be said that the
employees of SMEs Tempe Chips in Sanan are happy
ISSN: 1693-5241 123
 Lidya Priyanka, Margono Setiawan
to work in making Tempe Chips, but employees want
to get higher salary to meet their needs of life. Organi-
zational Commitment does not mediate the effect of
TQM on the performance of SMEs Tempe Chips.
Suggestion
Based on the discussion and the correlation
between the indicators, then the suggestions which
can be given are SMEs should improve the quality of
human resources by providing training to the
employees, improve the relationship with suppliers or
tempe supplier in order to maintain the good quality
of tempe that is used; therefore, they can produce
tasty, delicious and crunchy tempe chips. They also
should always improve the appearance packaging,
so that the chips are not easily damaged and attract
customers. Leaders and the employees should set
the targets of the products and also the marketing for
a period of two to five years, so that the SMEs are
more developed, advanced and can improve the
welfare of their employees. SMEs should be able to
improve their relationship with suppliers with
considering the ingredients of Tempe which are good
and delicious, in order to improve the quality of Tempe
Chips produced. It also can increase the sales. For
this time, employees in one SME move to another
SME, they must look for biggest income. SME leaders
should be able to improve their relationships with
employees, so that the feel that they also have the
SME they work in. SME leaders also should increase
the salary of employees in order to make them keep
working in their SMEs. The leaders of SMEs should
be able to improve the communication with all
members of SMEs in order to promote the progress
of the work, by increasing the formal and non formal
regular meetings like outing activity once a year, or
religious activities such as monthly recitation, to
encourage employees to participate in solving the
problems in SMEs. Government should provide skill
training for employees by using technology to improve
work effectiveness. The Government, in this case is
the Department of Cooperatives and SME Malang,
should be able to provide training and give TQM
certificate freely to SMEs, help promote products of
tempe chips outside the region and even overseas,
and call on the younger generation and the educated
academic to establish and promote the organization
124 JOURNAL OF APPLIED MANAGEMENT | VOLUME 15 | NUMBER 1 | MARCH 2017
of SMEs, given that most of SMEs tempe chips are
mostly using local raw materials, which could survive
when the rupiah weakens, can boost the economy
and welfare of the society. The next researchers can
conduct a research on the impact of TQM on
organizational performance through organizational
commitment. They can add another variable to SMEs
in the other region or organizations, and increase the
number of samples.
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